There are so many different businesses out there it's hard to know which ones to invest in.
The longer you invest the more you realise how many good investment opportunities there are out there that you don't know much about. That's why I'm comfortable with the idea of investing in listed investment companies (LICs) with effective investment teams that invest in shares I wouldn't normally consider.
Here are three LICs that fit the above description for me:
Clime Capital Limited (ASX: CAM)
Clime is a small LIC run by John Abernethy and his investment team. It has a portfolio that invests in ASX large caps, medium caps and small caps. It also invests some of the portfolio in overseas businesses.
Some of its top holdings include National Australia Bank (ASX: NAB), APN Outdoor Group Ltd (ASX: APO) and Collins Foods Limited (ASX: CKF). I don't own any of these, so with Clime I'd be getting diversification into these companies that I wouldn't normally invest in.
Clime has maintained or increased its dividend every year since 2012 and currently has a grossed-up dividend yield of 7.92%.
WAM Microcap Limited (ASX: WMI)
WAM Microcap is the newest LIC released by Wilson Asset Management. There is a lot of money to be made by investing in the right microcap, but it's hard to know which one to choose.
Wilson Asset Management have a knack for getting it right, which is why there is a good chance the investments in stocks like Swift Networks Group Ltd (ASX: SW1), SMS Management & Technology Ltd (ASX: SMX) and Reckon Limited (ASX: RKN) could work out.
WAM Microcap plans to pay a dividend once the business has made a profit.
Whitefield Limited (ASX: WHF)
Whitefield invests in all the large caps of Australia such as Commonwealth Bank of Australia (ASX: CBA), BHP Billiton Limited (ASX: BHP) and Telstra Corporation Ltd (ASX: TLS).
I'm not a big fan of most of the biggest businesses on the ASX but Whitefield has shown it can generate market-beating returns by focusing on them.
Whitefield has a grossed-up dividend yield of 5.38%.
Foolish takeaway
I think all three LICs are a good way to diversify your portfolio whilst still getting good returns. WAM Microcap should be a winner and Clime continues to pay a pleasing dividend.
